Saturday, January 28, 2023
HomeNewsBrazil Busts Crypto Pyramid Scheme Involving $210 Million

Brazil Busts Crypto Pyramid Scheme Involving $210 Million

Brazilain authorities have arrested ten people in a massive search and seizure operation for running a pyramid scheme involving cryptocurrencies worth BRL 850 million (around $210 million).

As reported by local media platform Correio Do Povo on May 21, multiple agencies, including the police force and tax agency of the country, started a major investigation called Operation Egypto to take down the perpetrators operating the scheme.

Discover the Barcelona Trading Conference – A Top Tier Crypto Trading Event

The authorities investigated 13 individuals and five legal entities for their involvement in the scheme, named Indeal, which defrauded around 55,000 investors.

While talking to the press, the regional superintendent of the Brazilian police department stressed that the operators did not obtain a license and were receiving funds without authorization.

They lured thousands of investors with a guaranteed payout of 15 percent after the first month of investment.

The investigations also concluded that the scheme resembles a classic pyramid model and would collapse by a simultaneous withdrawal request by all its investors.

Indeal operators even used investor funds to purchase luxury items, including 36 cars and precious stones, all of which were seized by the authorities.

The company also maintained accounts in three banks, and according to the tax auditors, the deposits in all the accounts can exceed BRL 1 billion (more than 247 million). The auditors also revealed that 80 percent of the investors contributed around BRL 20,000 (near about $5,000).

Pyramid schemes siphoning funds

The combination of wild returns and minimum regulations has encouraged many fraudsters to lure investors towards shady schemes. In the United States, the Securities and Exchange Commission (SEC) recently halted the fundraising attempt by Argyle Coin, alleging the startup for running a Ponzi scheme.

Moreover, the multi-billion crypto-based pyramid project Onecoin has also attracted the attention of regulators all around the world. Recently, in a statement, the company rejceted claims that it is operating a Ponzi scheme.


Most Popular